Press Release. New Enhancements to the Reverse Mortgage Programme

Transcription

1 Press Release New Enhancements to the Reverse Mortgage Programme The Hong Kong Mortgage Corporation Limited (HKMC) today (Thursday) announced a number of new enhancements to the Reverse Mortgage Programme (RMP) with a view to offering reverse mortgage borrowers a higher monthly and lump-sum payouts and / or a greater flexibility in their financial planning. The new enhancements, which come into effect today, are applicable to both existing and prospective reverse mortgage borrowers. Details are set out as follows:. Properties provided as security under the RMP are no longer required to be the borrower s principal residence, but they must not be rented out unless with the bank s written approval; and. More than one property can be used as security for application of a reverse mortgage loan. The determination of maximum amount of specified property value is subject to the aggregate amount of appraised property value (Please see Annex A); and 3. The maximum number of joint borrowers will be increased from two to three. (Please see Annex B for the payout calculations); and Only applicable to a new application for a reverse mortgage loan.

2 4. Assignment of life insurance policy to the bank as additional collateral under the RMP is allowed. Borrowers may take out lumpsum payouts for the repayment of outstanding policy loans and/or payment of unpaid premiums of their life insurance policies to be assigned to the bank under the RMP (Please see Annex C for the indicative monthly payout amount). A microfilm premiere was held by the HKMC today in connection with the announcement of the new enhancements. The premiere was attended by over 80 participants including representatives from banks, other related organisations, as well as the famous local celebrity Shek Sau and his son Sam Chan Yu-sam. The microfilm titled Sweet Home is now available on YouTube ( for viewing. The Chief Executive Officer of the HKMC, Mr Raymond Li said, With the introduction of the new enhancements, the needs for more flexible retirement planning would be better served. Some of the new enhancements would be able to increase the borrowers monthly and lump-sum payouts. In addition, we will continue to enhance public awareness and understanding of the RMP through different kinds of educational and promotional activities. For more details about the product, please refer to the RMP leaflet and the information pack available on the HKMC website ( For enquiries, please call the RMP Hotline: The Hong Kong Mortgage Corporation Limited March 05

3 Photo caption: Mr Raymond Li, the Chief Executive Officer of the HKMC and representatives from the RMP s participating banks attend the toasting ceremony at the Microfilm Premiere. 3

4 Photo caption: Two borrowers share their reverse mortgage experiences at a chit-chat session co-hosted by Mr Raymond Li, the Chief Executive Officer of the HKMC and the celebrity Shek Shau. 4

5 Annex A Maximum amount of specified property value for payout calculation Appraised property value HK$8 million or less Over HK$8 million to HK$ million Over HK$ million to HK$6 million Over HK$6 million Maximum amount of specified property value for payout calculation^# 00% of appraised property value Higher of 80% of appraised property value and HK$8 million Higher of 70% of appraised property value and HK$9.6 million Higher of 60% of appraised property value and HK$. million (capped at HK$5 million*) ^ For any refinancing property with appraised property value at HK$ million or below, the maximum amount of the specified property value for payout calculation will be 80% of the appraised property value. * For any property valued at HK$5 million or above, the maximum amount of the specified property value for payout calculation will be capped at HK$5 million. # The determination of maximum amount of specified property value is subject to the aggregate amount of appraised property value for cases with more than one property as security under a reverse mortgage loan. 5

6 Annex B Monthly payout amount (per HK$ million of specified property value) Entry 60 years old 70 years old age Payment 3 3 Term borrower borrowers borrowers borrower borrowers borrowers 0-year $3,700 $3,300 $3,000 $5,00 $4,600 $4,00 5-year $,800 $,500 $,50 $3,800 $3,500 $3,00 0-year $,400 $,00 $,900 $3,300 $3,000 $,700 Life $,000 $,800 $,550 $3,00 $,800 $,400 6

7 Annex C Indicative monthly payout amount (per HK$ million of specified property value plus HK$ million of cash surrender value) # Entry age Payment term borrower 55 years old 60 years old 70 years old borrowers borrower borrowers borrower borrowers 0-year $5,50 $4,800 $6,500 $5,780 $9,00 $8,00 5-year $4,60 $3,670 $4,90 $4,340 $6,840 $6,0 0-year $3,570 $3,080 $4,00 $3,700 $5,860 $5,30 Life $,850 $,490 $3,50 $3,080 $5,500 $4,960 # The monthly payout amounts are solely determined by the HKMC on a caseby-case basis and may be different from the above indicative levels. 7